A Million Veterans Would Benefit from a Minimum Wage Increase

We ask a lot of our armed forces. They serve our country in some of the most dangerous environments and difficult situations faced by any American. Yet having endured those experiences, too many veterans returning to civilian jobs find themselves in work that barely pays enough to live on. In fact, of the roughly 10 million veterans working in America today, 1 in 10—that’s one million veterans—is paid wages low enough that they would receive a raise if the federal minimum wage were increased to $10.10 per hour, as proposed in the Fair Minimum Wage Act of 2013.

Months ago, we released an analysis showing that increasing the federal minimum wage to $10.10 would lift wages for 27.8 million workers nationwide. The one million veterans that would benefit from such an increase are a relatively small segment of this larger group, but the fact that a million former service members would benefit from raising the minimum wage should dispel the persistent myth that raising the minimum wage only benefits teenagers and students from affluent families. Not only is this an inaccurate description of the typical low-wage worker, but the veterans that would get a raise look nothing like this affluent teen stereotype and are, in some ways, noticeably different from the larger population of would-be beneficiaries from a minimum-wage increase. (See the table below for details, or click here for a pdf.)

Unsurprisingly, the majority of veterans that would be affected by a minimum wage increase are men (80 percent), whereas the majority of the total population (veterans and non-veterans) that would be affected are women (55 percent). However, female veterans would still be disproportionately affected—they make up 20 percent of veterans who would be affected, yet only 14 percent of working veterans.

Veterans who would be affected by a minimum wage increase are significantly older than the total population that would be affected. 40 percent of the veterans that would benefit are age 55 or older, and almost two-thirds are age 40 or older. Of the total population (veterans and non-veterans) that would benefit from an increase, 14 percent are age 55 or older and about 34 percent are age 40 and older.

Given their older ages, it is perhaps not surprising that veterans who would get a raise are 50 percent more likely to be married than the larger group of workers that would get a raise under a $10.10 minimum wage.

Veterans who would get a raise tend to work longer hours than the total affected population (59 percent full-time among veterans vs. 54 percent full-time overall).

Veterans who would be affected by a minimum wage increase also have higher levels of education than the total affected population, with nearly 60 percent of affected veterans having some college experience, compared to 44 percent of the overall affected population.

Of workers affected more than half (53.8%) are full-time, and more than half (51.9%) live in households with below $40,000 annual income. The full-timers will get a $3,250 raise, about a 15% raise. The Social Security Administration publishes an annual wage income accounting, it shows 23.3 million workers (15% of all wage earners) earning less than $5,000 annually in 2012. See http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2012
The SSA report shows 153 million wage earners, not 130 million in the CPS of the Census. This is pretty confusing. One in six to one in five of all U.S. workers will get a raise, and for half it will be around a 15% raise. The average EITC benefit is $2,950 yearly (from CBPP report) and that compares to the average $2,450 gain from this increase. Labor’s share has been dropping and this will improve it. But half of U.S. workers or about 77 million workers, according to the SSA, receive collectively only $750 billion in wages, and that’s under 6% of all personal income.

Note that Democrat Harry Reid voted no as well; he voted no because there’s some weird thing in the Senate rules that will allow him to bring it up again provided he voted no.

Roslyn

I really enjoyed reading this information. However, I think there needs to be a raise for all of the veterans, equally. I think that this article really showed how different each Veteran’s pay is and that the amount of education, if they are married or not, and age really affect their income as well. Even with the constant raises, it is crazy that the ones who have survived through the military and have retired are more likely to get paid more than those who die in combat. Although there families, if they have a spouse and children, get some extra money from the passing, they still don’t get nearly the same as those Veteran’s who have retired and lived. Thank you for all the information.

Search for:

Sign up to stay informed

Follow EPI

Track us on Twitter

EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.